What is the importance of incoterms? Explain your views with example? The goal of incoterms is to alleviate or reduce confusions over interpretations of shipping terms by outlining exactly who is obligated to take control, pay costs or passing of risk of loss or damage at a particular point in the shipping process. The INCOTERMS were created by the ICC and regulate the rights and obligations of buyers and sellers in international commodity handling. The incoterms are international rules for structuring a particular group of contractual clauses that are used in commercial agreements. Incoterms identify the physical point in the supply chain where risk of loss or damage passes from the seller to buyer. It also determines the point in the supply chain where responsibility for transportation and customs related costs shift from the seller to buyer. Finally, incoterms identify specific functional responsibilities between the seller and buyer related to the delivery of goods. In general it shows and regulates: * The division of costs

Cost, insurance, freight (CIF)The "cost, insurance, freight" (CIF) Incoterm can only be used if at least part of international carriage of the goods is by water. The seller (exporter) is responsible for transporting the goods from his place of business to the named port, loading onto the ship, clearing the goods for Customs in the exporting country and paying international freight costs and must also bear the corresponding carriage insurance in favour of the buyer (importer). Title transfers when the goods are on the ship. If the goods, which henceforth belong to the buyer, are damaged or stolen during international transportation, the buyer must assert his insurance claim on the basis of the insurance taken out in his favour by the seller. The buyer must bear the cost of Customs clearance, carriage and insuring the goods in the importing country. If the Customs valuation basis is "free on board" (FOB), the international insurance and freight costs must be deducted from the "cost, insurance and freight" (CIF) price. The "cost, insurance, freight" Incoterm takes the form "CIF, named destination port". If, for example, the goods are exported from Piraeus, the wording is "CIF, Piraeus".

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...﻿Incoterms are useful for companies involved in international freight transactions. These incoterms are used to determine risks and responsibilities between buyers and sellers and are defined as follow:
EXW (Ex Works): Is when the buyer assumes all costs and risks involved in taking the goods from the seller’s to the destination. The seller's requirement is to make the goods available at his locations (works, factory, and warehouse). This term represents minimum obligation for the seller. This term can be used across all modes of transport.
FCA (Free Carrier): The seller's obligation is to hand over the goods, cleared for export, into the charge of the carrier named by the buyer at the named place or point. If no precise point is indicated by the buyer, the seller may choose within the place or range stipulated where the carrier should take the goods into his charge. When the seller's assistance is required in making the contract with the carrier the seller may act at the buyers risk and expense. This term can be also used across all modes of transport.
CPT (Carriage Paid To): The seller pays the shipping for the carriage of goods to the named destination. The risk of loss or damage to the goods occurring after the delivery has been made to the carrier is transferred from the seller to the buyer. This term requires the seller to clear the goods for export and can be used across all modes of transport.
CIP (Carriage & insurance...

...ISM GLOSSARY
OF KEY SUPPLY M ANAGEM ENT TERM S INCOTERMSIncoterms (International Commercial Terms) were developed by the International Chamber of Commerce (ICC) as a uniform set of rules to clarify the costs, risks and obligations of buyers and sellers in international commercial transactions. Because they address issues relating to import and export, the Incoterms are most appropriate for use in international shipping; they are, however, used for U.S. domestic shipping as well. The Incoterms are periodically revised and multiple versions are available for use by contracting parties. Incoterms 2000 became effective January 1, 2000, and remain in effect. Incoterms 2010 are effective as of January 1, 2011. Refer to the ICC Web site at www.iccwbo.org/incoterms/id3040/index.html for information about these terms and their definitions, which are copyrighted by the ICC. Note: Although the new Incoterms 2010 became available for use as of January 1, 2011, Incoterms 2000 continue to be available. It is incumbent upon contracting parties to determine which term they want to use and to designate the version being applied. For some time the Incoterms have consisted of 13 terms. Incoterms 2010 eliminates four of the previously-existing terms (DDU, DES, DEQ and DAF) and adds two new terms (DAT and DAP), resulting in a total of 11...

...INCOTERMS 2010 -Summary
The INCOTERMS (International Commercial Terms) are international trade terms developed by the International Chamber of Commerce (ICC) with the objective to eliminate uncertainty of intent and obligation as to shipments between importers and exporters.
1. EXW {+ the named place}
Ex Works
Ex means from. Works means factory, mill or warehouse, which are the seller’s premises. EXW applies to goods available only at the seller's premises.
Buyer is responsible for loading the goods on truck or container at the seller's premises, and for the subsequent costs and risks.
In practice, it is not uncommon that the seller loads the goods on truck or container at the seller's premises without charging loading fee.
In the quotation, indicate the named place (seller's premises) after the acronym EXW, for example EXW Kobe and EXW San Antonio.
The term EXW is commonly used between the manufacturer (seller) and export-trader (buyer), and the export-trader resells on other trade terms to the foreign buyers. Some manufacturers may use the term Ex Factory, which means the same as Ex Works.
SELLER’S RESPONSIBILITIES
Make goods available at the factory or depot for collecting by the buyer
BUYER’S RESPONSIBILITIES
Load goods onto a vehicle.
Transport the goods to their destination
Arrange all export and import procedures ( all documents)
Arrange insurance for the goods
RISK TRANSFER
All risk is with the...

...The difference between Incoterms 2000 and Incoterms 2010
International Commerce Terms (Incoterms), introduced by the International Chamber of Commerce (ICC) in 1936 primarily for individuals participating in global trade, serves as a guideline for the acquisition and transportation of goods internationality (Varoujian, 2011). Incoterms is beneficial to businesses because it helps regulate the risks, costs and other obligations. While it is recommended that businesses who engage in trade implement Incoterms, it is not mandatory and should be agreed upon by both parties (Varoujian, 2011). Due to the increase in global sales and international trade, the Incoterm are updated every ten years to account for the growth and development in the trade market (Shepherd & Graham). The Incoterm 2010 came into effect on January 1, 2011 and includes changes in terminology, commodity sales, and handling charges. Also included in the update are guidance notes that explain the basic of each Incoterm rule, when it should be used, when risk passes and so on (Shepherd & Graham). Both the seller and buyer are obligated to follow these rules (once contracted). The updates are flexible and buyers/sellers can resort to using the old guidelines as long as they specify which version they are using in their contracts (Shepherd & Graham).
Some terminology was changed in the update that...

...Are Incoterms relevant in today’s commercial setting?
An analysis of the benefits and issues related to the practice
10/5/2012
Akshat Kukreja
1. Introduction
Trade between countries has increased manifold with the advent of globalization. This boost in global trade has also increased the complexity in dealing with international laws and customs. Harmonization of these vast arrays of legal terms and complexities led to the incorporation of “Incoterms” (International commercial terms) into modern contracts.
Incoterms are trade terms used in a contract for sale. They specify in exact terms the cost and risk borne by the seller and the buyer, and more importantly draw the line where the risks and costs are passed in the transaction. Once incoterms have been correctly incorporated into a sales contract, parties to that contract can clearly ascertain their respective obligations despite their different languages and professional backgrounds.
Nevertheless, in the recent past, we have also seen that as a consequence of trying to standardize mercantile processes all over the world, the use of incoterms has been mainly as a tool for guidance, with parties incorporating their own variations to the terms. There have also been legal issues concerning the incorrect usage of incoterms, sending a clear signal that knowledge and understanding of these important terms is not yet universal....

...﻿Acc. Essay 3
“Sales from a long-distance country.Incoterm”
To control the sales from long-distance countries and to ensure that the rights and duties of both the seller and the buyer are respected; there are some international commercial terms or as it is more commonly known: incoterms.
These international commercial terms are used all over the world by businesses when referring to make sales. These terms divide the rights and duties of selling between the seller and the buyer. They were first introduced in 1936, but there have been some modifications and new terms due to the development and evolution of the international trade market. To refer to the latest revisions people say “Incoterms 2000”.
According to these international commercial terms both buyer and seller must respect the place where they agreed to be delivered the goods. The seller have some obligations and payments to do to guarantee the correct delivering of the goods, once they are received by the buyer he/she must pay some of those expenses to the seller. These are only a few of the obligations that they have.
To sum up, in my opinion these are very important and really necessary to guarantee that neither the sellers or buyers take advantage of the other one. And also to guarantee a fair and legal international trade market and to avoid possible monopolies.
TOPIC: Comprehensiveincomestatement
In this essay I’m going to explain and talk about the comprehensive income...

...New Incoterms 2010 – a summary of the principal changes to Incoterms 2000
Introduction On 1 January 2011, the ICC’s Incoterms 2010 come into force. These are the eighth revision of the Incoterm Rules, with the last revision dating back to 2000. The new Rules have been revised to take into account developments in international trade over the past ten years as the volume and complexity of global sales has increased, to address security issues arising in recent times and to provide for the ongoing changes in electronic communication. The new Rules also recognise the growth of customs-free areas.
AV I ATI O N | B U S I N E S S & F I N A N C E | C O M M E R C I A L D I S P U TES E N E R G Y & O F F S HO R E | I N S U R A N C E & R E I N S U R A N C E
I N TE R N ATI O N A L TR A D E | S HI P P I N G
One of the principal concerns with regard to the Incoterms has been that often the wrong term is selected for use by the parties. The introduction to the new 2010 Rules stresses the need to use the term appropriate to the goods, to the chosen means of transport and to whether or not the parties intend to impose additional obligations on the seller or buyer. In addition, there are Guidance Notes (and a diagram) at the front of each Incoterms Rule containing information to assist in making a choice on which Rule to use. Summarised below are the principal changes to the 2000 version....

...Incoterms 2010 – ICC rules for the use of domestic and international trade terms
The Incoterms rules are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) widely used in international commercial transactions. The Incoterms rules are intended primarily to clearly communicate the tasks, costs and risks associated with the transportation and delivery of goods. The Incoterms rules are accepted by governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade. They are intended to reduce or remove altogether uncertainties arising from different interpretation of the rules in different countries.
There are seven rules for any modes of transportation:
EXW – Ex Works (named place of delivery): The seller makes the goods available at its premises. This term places the maximum obligation on the buyer and minimum obligations on the seller. EXW means that a seller has the goods ready for collection at his premises on the date agreed upon. The buyer is responsible for all transportation costs and risks for bringing the goods to their final destination. The seller does not load the goods on collecting vehicles and does not clear them for export. If the seller does load the goods, he does so at buyer's risk and cost. The parties can agree otherwise, but it has to be included in a contract. In FCA – Free Carrier...